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Doing business in Kazakhstan (important practical aspects)
Registration of
Companies
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Options:
- Representative Office
- Branch
- Limited Liability Partnership (LLP)
- Joint Stock Company
Practical choice: Charter capital:
- Branch -Branch - not required
- LLP (used also for joint ventures) -LLP – min.100 KZ tenge = 40 cents.
Founders: local and/or foreign
Allowed activities:
- Branch - same as parent company
- LLP - any activity except activities which are subject of licensing.
Such kind of activity can be conducted once an appropriate license is obtained
Timeframes:
- Branch – 10 working days
- LLP – 3 working days
Practical issues:
- Timeframes
- Legal address
TAXATION
Branch:
Subject to Corporate income tax at the rate of 20% and branch profit tax at the rate of 15%
(reduced to 5% under applicable Double tax treaties).
LLP:
Subject to corporate income tax at the rate of 20%. Dividends of owner of the Subsidiary are
subject to corporate income tax at the rate of 15-20% (reduced to 5% or 10% under applicable
Double tax treaties).
Salary taxes/contributions:
-Individual income tax;
-Social tax;
-Social contributions;
- Pension contributions.
Approximately 20-30%
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Employment Matters
• Contracts:
- for an undefinite period;
- for a definite period but not less than one year;
- during the performance of a certain work ;
- for the time of replacement of a temporarily absent employee;
- for the time of the seasonal work.
Probation period can not exceed more than three months.
Foreign employees must obtain a work permit (including the head of the LLP). To obtain a work permit special conditions are to be executed.
Labour code provides an opportunity to conclude an agreement on material liability of an employee and non-disclosure agreement.
Minimal salary for 2015 – 21 364 KZT = $69
• Practical issues:
- termination of employment contracts;
- fulfillment of special conditions under a work permit;
- salary for the managers
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Contracts with
Customers/Clients
Main Structure: - subject of a contract;
- contract price and payments’ schedule;
- rights and obligations of parties;
- acceptance procedures of services/goods;
- responsibilities of parties;
- term of a contract;
- dispute resolution.
• International arbitration is allowed.
Procurement Rules for: - state companies;
- national companies (Samruk-Kazyna, Bayterek holding);
- subsoil users.
Options to secure execution of contracts:
- Bank guarantee; - Insurance; - Corporate guarantees.
Practical issues: • - contracts under procurement rules are approved and usually not negotiated;
- local content;
- claiming bank guarantees and insurances.
- construction licenses!!!!
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GRATA key facts
• Largest Independent Eurasian Law Firm, established in 1992
• 13 Practice Groups and 5 Industry Groups.
• More than 120 qualified lawyers in 15 offices in 9 jurisdictions. Eleven offices in Kazakhstan:
Astana, Almaty, Atyrau, Aktau, Aktobe, Kostanai, Kyzylorda, Uralsk, Pavlodar, Ust-
Kamengorosk and Karaganda.
• Business offices in Russia, Belarus, Tadjikistan, Azerbaijan, Uzbekistan, Turkmenistan,
Turkey
• 5 worldwide marketing offices (Vancouver, Amsterdam, Beijing, London and New York).
• More than 800 permanent clients (90% of whom are foreign companies/investors).
• Confirmed by high ratings in respectable publications such as Legal 500 and Chambers.
• Practice areas: Construction, Infrastructure, Industry, Trade, Subsoil, Mining, Transportation,
Telecommunication
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GRATA’s experience
- advising a state-owned company in relation with conclusion of EPC contract
on a construction of a new special economic zone;
- advising an UAE based company on possible participation in a consortium for
a construction tender;
- advising a state-owned company on a joint venture with a foreign company
on the project to exploration of the field;
- advising a state-owned company on the project on implementation and
construction of the Plant for producing of the float glass in South Kazakhstan
(“turnkey” project);
- advising an Italian construction company – General Contractor on the Project
'International Transit Corridor 'Western Europe – Western China' - on various
aspects of the law including dispute resolution with subcontractors, customs
issues, labour issues and taxation;
- advising a Spanish company implementing a joint project with a national
company for manufacturing coaches with regard to taxation issues within
Special Economic Zones
Thank you for your attention!
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KEY CONTACTS
Samat Daumov
Managing Partner, Head of Astana Office
Tel.: 7 (7172) 689-929
Mob.: 7 701 761 08 82
E-mail: sdaumov@gratanet.com
Liya Akzhanova
Counsel
Construction & Infrastructure
Tel.: 7 7172 689 929 (ext.105)
Mob.: 7 701 523 84 68
E-mail: lakzhanova@gratanet.com
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